Thursday, June 9, 2016

Lump of Labor Fallacy

Economists call it the ''lump of labor fallacy.'' It's the idea that there is a fixed amount of work to be done in the world, so any increase in the amount each worker can produce reduces the number of available jobs. (A famous example: those dire warnings in the 1950's that automation would lead to mass unemployment.) As the derisive name suggests, it's an idea economists view with contempt, yet the fallacy makes a comeback whenever the economy is sluggish.

(via Paul Krugman)